Eskom woes are considered to be the major obstacle holding back South Africa’s economic growth. Eskom was the site of corruption and state capture in the Jacob Zuma era. More recently, we have heard a slew of reasons for Eskom’s inability to keep the lights on, ranging from ageing power plants to maintenance problems. All these reasons for current problems are rubbish, apparently. That’s the upshot of in-depth analysis by Prima Research on Eskom as SA heads towards winter. This fascinating work points to a simple solution: get more engineers and technicians back into Eskom, fast. – Jackie Cameron
By Thulasizwe Sithole
Eskom claims that the current wave of power cuts is a result of a lack of maintenance and an ageing plant infrastructure are not true. The outages are a consequence of a harsh focus on staff costs, which in turn resulted in a decline in the adherence to standards of operating practices.
So says Shamil Ismail of Prima Research, a financial services provider which has produced a powerful report, “Eskom: Winter is Coming”.
The 16-page report is packed with graphs illustrating detailed number-crunching based on in-depth insights on how power is produced in South Africa and elsewhere.
___STEADY_PAYWALL___
Among the key findings by Ismail:
- Eskom’s management has blamed inadequate maintenance in recent years as a critical contributor to poor plant performance. The company’s reports, however, do not support this assertion. Planned maintenance has been at or higher than management’s annual target since 2014 and maintenance spend has increased;
- Eskom’s fleet is ageing, but is well within its useful life. Globally the average retirement age of a coal power plant is 54 years; the average age of Eskom’s fleet is just under 30 years;
- Recent loadshedding is not because of a shortage of installed capacity but a decline in operational efficiency.
Ismail has also examined what has gone wrong since 2018, which was a “tipping point” in power outages. He notes that a new board was appointed in early 2018, with a series of decisions that led to the loss of qualified, experienced staff and a slump in staff morale.
“The worsened performance coincided with management’s efforts to curb staff costs, which may have resulted in more skilled and operational staff leaving the company,” he notes.
Read also: Why can’t Eskom solve electricity crisis? It’s in a catch-22, say analysts. MUST READ!
In addition, Eskom’s training spend has been slashed over the years, with R2bn spent in 2014 and R1.2bn in 2019. In 2019, Eskom took on only 13 learners – which is extraordinary when you consider it took on about 2,200 every year between 2009 and 2018.
Ramped-up maintenance issues will not improve Eskom’s efficiency if staffing issues are not dealt with, he warns.
However, the right staff must be hired, the analyst cautions.
Ismail says an improvement in energy availability could be achieved within months if Eskom’s bosses focus on the company’s human capital – and this may include recruiting technicians and engineers from overseas.
Options to “augment capacity outside Eskom may be unnecessary and could result in higher costs to consumers,” adds Ismail.
